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While it is not a legal requirement to have a bribery policy in place for a business, if bribery does occur within an organisation, a defence will not be available without an effective policy in place.
In order to safeguard your business, it is always recommended to have an anti-bribery policy. The policy should be in line with the level of risk that your business faces. For instance, if you are running a financial business, there is generally a greater risk of bribery.
According to the Bribery Act 2010, it is illegal to receive, agree to, request, give, promise, offer or accept bribes in a business. If you think someone in your business has a role that could be exposed to bribery, then a policy should be in place. An anti-bribery policy should be monitored and updated frequently, and include details of:
An anti-bribery policy and anti-bribery clause operate at different levels. An anti-bribery policy is a set of guidelines and procedures put in place by a company to prevent bribery and corruption within its operations. Anti-bribery policies typically include guidance on gifts and hospitality, facilitation payments, third-party relationships, due diligence, reporting mechanisms, and consequences for non-compliance.
An anti-bribery clause on the other hand is a specific statement within a contract that addresses the parties' commitment to complying with anti-bribery laws and regulations. Having an anti-bribery clause within a contract formalises an obligation to conduct business legally and ethically, preventing and prohibiting bribery and corruption.
Section 7 of the Bribery Act 2010 makes business directors liable should a bribery offence be committed by an 'associated person'.
An 'associated person' is an individual who provides services on a company's behalf, but is not an employee of that company. For instance, people who undertake roles such as consultancy, sales agents, subsidiary companies and other partners or contractors are 'associated persons'.
A business has a defence in a bribery case if it can show that it has 'adequate procedures' in place to prevent bribery that is linked to associated persons.
Having adequate procedures does however go further than just having an anti-bribery policy. According to the Ministry of Justice, businesses should have an ongoing approach to prevent bribery. This includes frequent monitoring, assessment for risk, and taking swift and appropriate action if bribery has occurred.
The amount a company needs to monitor for bribery depends on the risk level and the industry the business operates in.
In more detail, here are the six principles for bribery prevention that have been issued by the Ministry of Justice. These principles should be upheld by all companies, and especially those operating across several countries, or in countries where bribery is seen as a more standard form of business practice.
The anti-bribery procedures and policies a company has in place must be proportionate with the level of bribery risk involved.
Top-level management such as the board of directors and company owners, must be totally committed to preventing bribery within an organisation, and must demonstrate this in their own actions.
An organisation must monitor the extent to which bribery could take place both externally and internally. As a business evolves, so does its level of risk.
Individuals who carry out services for or on behalf of an organisation must exercise due diligence and monitor risks of bribery.
Organisations must ensure that bribery prevention policies are understood across the company and that ongoing training is undertaken.
A company should frequently monitor, review and update procedures designed to prevent bribery.
Bribery is the receiving or giving of goods, services or money in exchange for action, influence or preferential treatment.
Bribery can involve authoritative figures, officials or private individuals. Some common examples of bribery within a business context include:
Giving or offering gifts, money or other benefits to a public official such as an immigration official, police officer, etc. to influence their actions or behaviour.
Offering bribes to competitor companies, business partners, contractors or other private companies to gain an advantage in business.
Making bribe payments to government officials in order to speed up application processes or approvals for licences or permits.
Giving money or other benefits to contractors or other business officials/employees to gain favourable treatment.
Offering hospitality or high-value gifts in order to influence a person's decision-making process within a business or government department.
Engaging an agent, contractor or other representative to engage in bribery practices on behalf of a company.
Promoting or hiring people based on personal relationships or favours rather than skills and experience.
Offering financial gifts, sponsorship or other advantages to political parties or politicians in order to get preferential treatment or to influence political decisions.
Failing to have anti-bribery procedures and measures in place, and turning a blind eye to knowledge of bribery taking place within a company.
The largest financial penalty for commercial bribery in the UK was issued to Glencore Energy UK Ltd, which had to pay £280,965,092.95, after a Serious Fraud Office (SFO) investigation uncovered that the company had paid $29 million in bribes to gain preferential access to African oil.
The financial penalty was the largest ever given by the SFO, and Glencore Energy Ltd. pleaded guilty to seven counts of bribery. The investigation revealed large cash withdrawals, text message communications and concealed bribery payments from Glencore to secure access to oil in markets in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan (source: Serious Fraud Office).
The UK Bribery Act 2010 states the following penalties for individuals who commit bribery offences:
The Act also states that if a company has enabled bribery or allowed it to happen because of inadequate anti-bribery procedures, the following penalties may be given:
It should also be considered that an organisation which is found guilty of bribery will also suffer considerable reputational damage, a loss of revenue and high legal fees should it decide to fight the case against it.
Active bribery is offering, promising, or paying a bribe to an individual or company. The Bribery Act 2010 states that a person can still be found guilty of bribery even if they are under duress. Here are some examples of active bribery:
Passive bribery is the agreeing to, receipt of or acceptance of a bribe. Examples of a passive bribe include:
To create a culture of integrity within an organisation, it is important that all staff and management are educated on what bribery is, the effects it can have on an organisation, and how to report it alongside other misconduct.
By engaging employees with role-based scenarios and training that is relatable, staff can recognise the risks of bribery more clearly, which will reduce the chance of a company falling foul of anti-bribery legislation. At the end of training, staff should take a test to ensure they have understood main concepts.
Effective anti-bribery training will ensure that staff understand the Bribery Act 2010, the differences between genuine business practice and bribes, procedures that are in place to ensure compliance, and penalties for corruption and bribery. They will understand how bribery could affect their role and the business as whole, and will gain insight into how to report bribery and suspicious behaviour.
Under English law, the principle of unjust enrichment is that a person should not receive a benefit at another individual's detriment without being asked to pay a reasonable value for the benefit. In court cases involving unjust enrichment, questions will be asked including:
In the context of a business with partners, directors or trustees, if a person conducts themselves in a way that does not benefit the organisation, such as acting dishonestly in their role for their own personal gains, they may be in breach of their statutory and common law fiduciary duties.
For example, there is an expectation that a director will act in good faith and in the company's best interests, with a level of skill and care. Their fiduciary duties include promoting the company's success, having independent judgement, accounting for unauthorised profits and avoiding conflicts of interest.
Legal action can be taken against an individual or a company for unjust enrichment or breach of fiduciary duties. Offering or accepting bribes can also result in a person being dismissed for gross misconduct.
At Neathouse Partners we can help you to understand the risks linked to bribery and corruption and how they can affect your business. Our experienced team of HR consultants and employment lawyers can advise on how to eliminate bribery through risk assessments, training and the development of an anti-bribery and corruption policy.
Call 0333 041 1094 today or use our contact form.